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Stakes rise in Bermuda reinsurer bidding triangle

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Axis Capital Holdings Ltd. on Monday said it revised its offer for PartnerRe Ltd., adding a special one-time cash dividend of $11.50 per share to its merger offer in response to Exor S.p.A.'s $130-per-share all-cash offer for the reinsurer.

Axis and PartnerRe, both based in Pembroke, Bermuda, also took the opportunity to pledge their support for the merger, while Italy-based Exor also weighed in with its latest pitch.

“Axis Capital and PartnerRe have already made significant progress toward realizing our shared vision of a broadly diversified global specialty insurance and reinsurance company with the scale, capital and market presence to compete at the highest levels of our industry,” Albert Benchimol, Axis president and CEO, said in a statement.

“The first phase of the integration planning, which focused on the design of high-level target operating models by business and functional leaders, is now complete,” Axis said in its statement. “The second phase of integration, which is focused on bringing these operating models to fruition, is in progress.”

For its part, Exor touted its $6.4 billion bid and maintained the revised Axis offer still undervalues PartnerRe.

“The decision by the PartnerRe board continues to ignore the superior nature of Exor's fully financed, all-cash proposal of $130 per share, which offers a significant premium to PartnerRe's shareholders,” Exor said in a statement. “In contrast, Axis' revised transaction still undervalues PartnerRe and is clearly not in the best interests of PartnerRe, its shareholders, employees and policyholders.”

Exor added that PartnerRe's acceptance of the Axis bid was the result of a “flawed process.”

PartnerRe also has its say.

“On behalf of the entire PartnerRe board, I am very pleased with the new terms agreed with Axis Capital as they appropriately recognize for our shareholders the significant value of our company,” PartnerRe Chairman Jean-Paul Montupet said in a statement.

“The PartnerRe Board concluded … that the Exor proposal does not properly or adequately value PartnerRe, as it does not fully recognize the strength of its balance sheet and the value of its franchise,” Mr. Montupet said in the statement. “Further, the PartnerRe board determined that superior value is created through the enhanced merger terms with Axis Capital, and the substantial long-term value potential of the combination with Axis Capital.”